Banking News

The prospect of record low savings rates continuing is forcing many savers to review how they allocate their capital in an attempt to achieve the level of returns they have previously enjoyed. Investing in the stock market inevitably involves putting your capital at risk however there is a middle ground which continues to attract increasing interest – the structured deposit. With this in mind, we take a deeper look at this savings alternative to help understand why more and more savers are starting to see their appeal. more

With the current economic environment asking savers far more questions than it gives answers, it is good to know that there are alternatives available. We take a look at one such alternative that is proving particularly popular as savers face the harsh reality that the more traditional fixed rate savings products are failing to meet their needs. more

Millions of savers are facing the harsh realisty that there is little hope of change to interest and savings rates in the coming years. However, those with Cash ISAs do have one further option to consider – the ISA transfer. We take a closer look at why this is becoming a rising trend as well as what this could mean for those looking for the potential to improve the returns from their capital. more

With so many savers joining income investors in the hunt for high yields, being able to quickly understand and compare the numerous options available has become even more important. We therefore compare two of our most popular income investments to help understand what is driving their popularity and why they might meet your income needs. more

RBS and Lloyds announce losses while Barclays enjoys jump in profits

08 May 2009 / by Rachael Stiles

While RBS has announced pre-tax losses of £44million, and Lloyds has warned losses on its corporate loan book will rise to £13.5billion this year, Barclays is basking in a 15 per cent rise in profits.

RBS, which is 70 per cent owned by the taxpayer, already announced a record loss of £24.1billion last year – the biggest in UK corporate history – and has also announced bad debt charges of £2.9billion for the first quarter of 2009.

Stephen Hester, chief executive of the RBS group, said that the figures reflect the "challenging conditions" currently facing the market, and which he expects to continue.

"We expect credit conditions to continue to deteriorate over the next few quarters consistent with these trends," he said. "Some commentators are beginning to

talk about economic recovery; we remain cautious and continue to plan and manage our businesses in the full expectation that both 2009 and 2010 will be very tough years for RBS."

Similarly, Lloyds Banking Group has said in its interim management statement that, consistent with its previous predictions for the year, the first quarter of 2009 saw a "significant rise in impairment levels" at the group.

This is largely due to "the impact of the further economic deterioration, including the effects of rising unemployment, reduced corporate cash flows, the continuing impact of lower house prices and falls in the value of commercial real estate," the statement said.

Anticipating a "continuing difficult economic outlook," the group estimates that corporate impairments will be 50 per cent higher this year than in 2008, causing some shareholders to call for a change in management.

Meanwhile, despite experiencing a 79 per cent increase in bad debts during the credit crisis, Barclays has announced a 15 per cent rise in profits for the same period, to £1.37billion, compared to the first quarter of 2008.

John Varley, chief executive of Barclays, said in the group's interim statement that the first quarter results show the "continued benefit of diversification" across its businesses. "We generated strong income growth across most business lines," he continued, as a result of expanding its investments and buying US bank Lehman Brothers.

"This, together with good cost control, has enabled us to shield the anticipated increase in impairment and absorb further credit market writedowns on legacy assets," Mr Varley added. "We recognise the importance of continued capital generation and we remain committed to prioritising returns over growth and to reducing leverage."